Written by M. Sean High—Staff Attorney
Agricultural producers face numerous complex federal and state agricultural labor laws. Unfortunately, failure to comply with these laws could result in costly sanctions. To assist interested individuals to better understand an agricultural producer’s labor legal obligations, the Penn State Center for Agricultural and Shale Law is publishing a series of Spotlight articles addressing key farm labor issues. The first article in the series covers an agricultural producer’s legal obligations under the Fair Labor Standards Act.
The Fair Labor Standards Act
The Fair Labor Standards Act of 1938 (FLSA) sets the federal standards for overtime pay, minimum wage, and child labor. FLSA requires an employment relationship and is not applicable to independent contractors. Nevertheless, even if an employment relationship does exist, FLSA may provide an agricultural employer with an exemption to the law’s requirements.
Employee or Independent Contractor
Because FLSA applies only where an employment relationship exists, an agricultural producer must first determine whether a given worker is an employee or an independent contractor. Courts have ruled that a worker is generally considered to be an employee of someone who has the right to control the worker’s behavior regarding the work that will be done. This right to control a worker’s behavior can be demonstrated through instructions, training, and financial aspects of the job being performed. Such instructions could be telling a worker when, where, and how to work; providing the tools and equipment that are to be used; and assigning the order in which tasks are to be performed. Additionally, employers often train workers to perform tasks in a certain way, while independent contractors ordinarily use their own methods. Finally, an employee is generally paid a wage based on an hourly, weekly, or monthly basis. An independent contractor, however, is generally paid according to a flat fee or based upon time and material.
A business or worker is subject to FLSA if either the enterprise coverage or the individual coverage applies. Under the enterprise coverage, FLSA applies to all businesses that have at least two employees and at least $500,000 a year in gross receipts. Under the individual coverage, FLSA applies to workers who are engaged in interstate commerce, in the production of goods for commerce, or in any closely-related process or occupation directly essential to such production. As a practical matter, nearly all agricultural employment will fall under one of the two types of FLSA coverage, but as described below, many agricultural employers are exempt from some of the law’s requirements.
FLSA Definition of Agriculture
An employee covered by FLSA may fall under one of the agricultural exemptions provided by the statute. For an agricultural exemption to apply, a worker must be performing agricultural work.
FLSA defines agriculture as farming and all its branches. Agriculture also is defined to include any practices which are performed either by a farmer or on a farm as an incident to or in conjunction with a farming operation. Things to consider when determining whether an activity is incident to or in conjunction with a farming operation include the following:
- Whether the activity is an established part of agriculture;
- Whether the activity is subordinate to the farming operation;
- Whether the activity is an independent business; and
- Whether the activity is ordinarily performed by farmers incidentally to their farming operations.
When assessing whether an activity is ordinarily performed by farmers incidentally to their farming operations, an employer must look at the proportion of other farmers producing the same commodity who also perform the activity. For example, a farmer who wants to demonstrate that the processing of milk into yogurt meets the definition of agriculture must consider how many dairy farmers, among all dairy farmers, also engage in the activity of processing their milk into yogurt.
Employees covered by FLSA generally must receive overtime pay of at least time and one-half of their regular rate of pay for hours worked over 40 in a workweek. FLSA, however, contains an agricultural exemption for overtime pay. Under FLSA, workers employed solely in agriculture are not entitled to overtime pay.
Even with the application of FLSA’s agricultural exemption for overtime pay, employers must still check with state overtime laws to see if an agricultural exemption exists. For example, under Pennsylvania law, labor on a farm is exempt from Pennsylvania overtime requirements. In California, however, overtime pay is required for agricultural employees working over 10 hours in a day or over 60 hours in a week.
Employees covered by FLSA generally must be paid a federal minimum wage rate of $7.25 per hour. The minimum wage rate must be paid regardless of whether the method of payment is hourly, salary, or piece rate. FLSA, however, contains a partial exemption applicable to agriculture. Under FLSA, agricultural employees are not entitled to minimum wage if one of the below-listed FLSA agricultural exemptions applies:
- The worker is an immediate family member of their employer (An immediate family member is limited to a parent, spouse, child, step-child, foster child, step-parent, and foster parent);
- The agriculture employer did not utilize more than 500 “man days” of agricultural labor in any calendar quarter of the preceding calendar year (A “man day” is any day during which an employee performs agricultural work for at least one hour);
- The worker is principally engaged in the range production of livestock;
- The worker is a local hand harvest laborer who commutes daily from his/her permanent residence, is paid on a piece-rate basis in traditional piece-rated occupations, and was engaged in agriculture fewer than 13 weeks during the preceding calendar year; or
- The worker is a non-local minor, 16 years of age or under, who is a hand harvester, is paid on a piece-rate basis in a traditional piece-rated occupation, is employed on the same farm as his/her parent and is paid the same piece-rate as those over 16.
Even when a FLSA agriculture exemption to the federal minimum wage applies, employers must always check state laws to see if the agricultural labor is subject to the state minimum wage. For example, under Pennsylvania law, labor on a farm is exempt from the state’s minimum wage rate of $7.25 per hour. If, however, the employee is classified under Pennsylvania law as a seasonal farm worker, the employee must be paid at least the statutory minimum wage or a piece-rate equivalent.
Anyone under the age of 18 years is legally considered to be a minor. Unless an exemption applies, FLSA sets the minimum age for employment in hazardous occupations at 18 years of age and the minimum age for employment in non-hazardous occupations at 16 years of age. Additionally, minors who are at least 14 years of age may be employed in certain limited occupations that carry restrictions on hours and work conditions. FLSA, however, does provide an exemption for minors employed in agriculture
FLSA establishes the following minimum age requirements for minors employed in agricultural occupations:
- Regardless of age, if a minor is employed by a parent on a farm owned or operated by the parent, the minor may work without any restriction;
- Minors who are 16 years of age may work in any agricultural job, whether hazardous or not, with no work hour restrictions;
- Minors who are 14 or 15 years old may work outside of school hours in any non-hazardous agricultural job;
- Minors who are 12 or 13 years old may work outside of school hours in any non-hazardous agricultural job at the farm where their parent works or with written parental consent; and
- Minors who are under 12 years old, with written parental consent, may work outside of school hours in any non-hazardous agricultural job on a small farm that is exempt from the federal minimum wage provisions.
While FLSA may provide hour and hazard exemptions for minors that work on a family farm or for any minor 16 years or older, agricultural employers must still look to other laws to see if the minor is permitted to engage in a specific activity. For example, FLSA would not prevent a 17-year-old from operating a forklift on a farm. Under the Occupational Safety and Health Administration regulations, however, it is a violation of federal law for anyone under 18 years of age to operate a forklift.
Agricultural employers must always be aware of FLSA requirements establishing federal standards for overtime pay, minimum wage, and child labor. FLSA does provide agricultural exemptions that may be applicable depending upon the nature of the farm and the type of work that is being performed. For an agricultural exemption to apply, a worker’s employment activity must meet FLSA’s definition of agriculture. Finally, agricultural employers must be mindful that even if exempted under FLSA, other federal and state laws may still apply.
29 USC Ch. 8: FAIR LABOR STANDARDS
U.S. Department of Labor, Wage and Hour Division, Fair Labor Standards Act in Agriculture: https://www.dol.gov/whd/ag/ag_flsa.htm
U.S. Department of Labor, Wage and Hour Division, Fact Sheet #12: Agricultural Employers Under the Fair Labor Standards Act (FLSA): https://www.dol.gov/whd/regs/compliance/whdfs12.htm
U.S. Department of Labor, Wage and Hour Division, Fact Sheet #40: Overview of Youth Employment (Child Labor) Provisions of the Fair Labor Standards Act (FLSA) for Agricultural Occupations: